West-side property values take off

Many are shocked to see assessments double and triple

Downtown renewal area

April 08, 2001|By Meredith Cohn | Meredith Cohn,SUN STAFF

Downtown Howard Street is slated for an overhaul in coming years that proponents say will infuse the west side with millions in public and private dollars and return residents and merchants to the city's former premier shopping area.

But as far as the state is concerned, things are already looking up on Baltimore's west side, where some of the largest increases in property values were recorded in the latest round of reassess- ments downtown.

Although that area represents just a fraction of the $1.8 billion in taxable property downtown, where values increased 20 percent overall, the west side had the largest cluster of assessments that doubled and tripled.

"I almost fell out of my chair when I saw it," Dora Weltlinger said of her notice of an assessment increase on her property at 7 N. Howard St., where she has a business on the first floor, Samsons Jewelry store.

The building's assessment grew from $49,500 to $172,100 - making it worth more than the larger building next door and potentially socking Weltlinger with a tax bill more than three times the $1,300 she has been paying each year. Unlike houses, tax increases on commercial properties are not capped.

"It's scary," said Weltlinger, who has appealed the assessment. "We can't make that kind of money here to pay the taxes. They keep telling us improvements are coming but not one extra customer has come in here."

Some of the buildings that saw big increases in value are undergoing or are slated for renovation. But in a number of cases, the higher assessments appear to have rubbed off on smaller, older buildings nearby.

Weltlinger, for instance, has made just minor upgrades in the five years she has owned her low-rise brick building across the street from the Paramount Hotel, which is part of the urban renewal program for the area.

The city recently agreed to purchase the hotel as part of the Centerpoint housing complex planned by Bank of America Corp.

The assessed value of the Paramount, at 8 N. Howard St., more than doubled from $974,600 in 1997 to $2.47 million, although the city plans to pay millions more for it.

While Weltlinger and others are optimistic that the city's largest urban renewal effort since the Inner Harbor will eventually mean more business, they fear the assessments will lead to unaffordable increases in taxes and rents.

Moreover, they cannot expect generous compensation packages, unlike those for businesses forced to move because of the revitalization program.

State assessment officials said the latest assessments reflect a building's true current worth, not future investments.

"We don't do predictions," said Owen C. Charles, the state's assessment supervisor for Baltimore. "We have no crystal ball and don't know what's going to happen in an area. We don't consider that in our assessments."

Charles said some higher assessments may be due to west-side buildings having rent-paying tenants for the first time since the real estate slump of the early 1990s. Other buildings have been upgraded with new roofs and other improvements.

Further, he said, some of the properties were underassessed during the last review three years ago.

But Charles acknowledged that with almost 1,000 taxable properties downtown alone, the Maryland Department of Assessments and Taxation does not have the manpower to go inside each building.

Assessors use formulas that take into account the revenue buildings generate - if they have that data - and recent comparable sales.

Some building owners might find relief in the appeals process; about 20 percent filed appeals by the Feb. 12 deadline.

Typically about 35 percent to 40 percent of appeals win reductions. That helps even out inconsistencies, he said.

It's not that unusual for neighboring buildings to be worth substantially different amounts, said Scott Basik, an attorney specializing in property tax matters.

"The values of the properties in that area are very dependent on their tenant situation," he said. "If they're producing significant rents, or if they've been partially or fully renovated, they can be much more valuable than the properties with significant vacancies that haven't been renovated."

Still, the new assessments remain puzzling to some.

Wendell L. Gladden has owned the same five buildings at Park Avenue and Saratoga Street for years. All saw significant increases in assessed value, but one at 236 Park Ave., used by the record store Music Liberated as office space and storage, rose more than 2 1/2 times, from $17,000 to $45,600.

"Why did the one go up so much more? We were wondering the same thing," Gladden said. "They all went up. We'll pay about 50 percent more this year altogether, but they're exactly like they were three years ago. Same buildings. Same tenants. And there's less business downtown than ever."

Gladden, who does not pass on tax increases to his tenants, said he did not appeal the new assessments because, "We've never been able to win in the past."